The Obama Retirement Trap Has Started

I begin with a quote from a politician who believed in an all-powerful central government and in using that power to achieve his vision for a nation. “He who has his thumb on the purse has the power.” ~ Otto von Bismarck, a statesman who created the modern Germany and known as the iron chancellor

But however well-intentioned he might have been, he built the regulatory groundwork and government institutions for a centralized federal state that was later taken over by an evil political leader who created a tyranny seldom seen in the world before, or after. The tyranny started in 1933, 35 years after Bismarck’s death, was National Socialism and the leader was Adolf Hitler. All of this came after Germany’s military defeat in World War One and a national debt crisis, followed by hyperinflation and currency collapse.

I fear that today the control, nationalization and ultimate confiscation of trillions in private US retirement plan assets is on the horizon. Rick Santelli alluded to the possible nationalization and forced investment into treasuries on CNBC as recently as January 8, 2010. There was also similar coverage on Bloomberg and Business Week.

Reports out of Washington indicate that new retirement annuities may be promoted by Obama aides. This is just the beginning! The question every successful American with substantial retirement assets must ask is “what will you do if our retirement funds are forced to become the buyer of last resort for US treasury obligations?” Unless you believe Congress and Washington bureaucrats will do a fair job of allocating and distributing your personal retirement assets between yourself and others, you must begin now to protect your assets.

As the United States moves into a new decade of military overreach abroad and national bankruptcy at home, Washington is on a desperate search for more revenue and a solution to the future financing of the trillions in national debt obligations currently held by foreign central banks and investors. Economists, politicians and smart investors know the dollar’s days as the world reserve currency are numbered, as is our ability to finance the national debt.

Although the historical government solution to unsustainable government debt loads has always been the destruction of the debts by currency depreciation and eventual hyperinflation, there is always an intermediate step used to buy more time for the politicians in power. This action, usually side-stepped and downplayed by the establishment historians paid to hide the real facts of history, is wealth confiscation. Napoleon had it right when he stated, “History is a state of lies agreed upon.”

The largest source of liquid private wealth remaining in the United States is the $15 trillion in private retirement funds. The ultimate ownership, control and future of these funds has already been compromised and exchanged for the favorable tax treatment of private retirement plans. Congress writes the laws, so they can tax, penalize, hold your funds hostage and, although they’d never use the word “confiscate,” use your assets at their discretion.

The retirement trap I’m writing about is only a proposal at the present time and since it may well begin in the latter years of the Obama Administration, assuming the Democrats can somehow maintain their majorities in Congress, I’m calling it the “Obama Retirement Trap.” But make no mistake, the government need for current revenue and their frenzied search for liquidity to monetize their debt obligations is an unspoken quest of both political parties. The establishments of both political parties will do whatever it takes to stay in power, including the raiding and pillaging of your retirement funds.

I am not a Johnny-come-lately to the area of retirement planning. Although I’ve been in the investment business since the early 1970’s, and often write about political and freedom-oriented issues, my background has always been in retirement planning. I’ve been following the government move to raid private retirement funds since the early 1980’s with my The Threat of the Private Retirement System book written in 1983. I warned again about this in my 1994 book Escape the Pension Trap. The threat receded somewhat with the Bush Administration, but it is now back with a vengeance and the revenue needs of Washington will eventually trump any government promises and guarantees.

I created the first self-directed hard asset IRA account for gold and collectibles back in the late 1970’s and I still remember the day when I was sitting in the office of James U. Blanchard III, a champion of liberty and sound money, in New Orleans. His National Committee to Legalize Gold spearheaded a nationwide grassroots campaign that restored the right of Americans to again own gold bullion following Roosevelt’s gold confiscation during the 1930’s Great Depression.

Congressman Ron Paul gave us a call to inform us that at the last minute, language had been inserted into the 1981 Economic Recovery Act, Section 314(b) ruling “collectibles” as not in the “public interest” of the United States and, therefore, prohibited from future retirement plan investments. This language promoted by Wall Street and the banks destroyed the opportunity to buy retirement investments performing best during those years of high inflation. More importantly, this section created a precedent for the Secretary of the Treasury to label any investment as not in the public interest in the future – and therefore prohibited from retirement plans.

You will be forced into another Social Security-like scheme with the proposed mandatory Guaranteed Retirement Annuity, with 5% of your salary confiscated into the program. You will also eventually find your existing retirement funds forced into the government program and you will lose your ability to invest and protect your retirement funds outside of the dollar, government bonds, and the US investment markets at some time in the future. The only questions are when and what the final details of this, the greatest potential wealth confiscation in the history of the world, will be.

My goal in writing this report is to make you aware of the threat with enough time to take some of my recommended actions to protect your retirement wealth, and thereby minimizing the Washington threat and their future confiscation efforts. Conventional retirement experts and most Wall Street investment advisors will say that I’m paranoid and crazy to advance such a theory because they want to retain the management, the fees and the commissions from your retirement investments.

The risks and threats of standing up to Washington’s wealth confiscation and aggression are great. But we have to take a stand. One of the greatest men in history I’ve studied was a relatively unknown, career army colonel coming from a respected family who lived right across the river from the nation’s capitol. Just before the start of a war, the head of the nation offered this officer the opportunity to take command of the entire national army if he would only lead an invasion and turn against his state and people. This officer declined the offer and all that went with it. The head of the nation was so outraged that he had the officer’s home and plantation occupied, confiscated and used as a burial ground for the war dead, never to be returned to his family or their descendants.

The president was Abraham Lincoln, the colonel was Robert E. Lee and his home, called Arlington, is now known as Arlington National Cemetery right across the Potomac River from Washington, DC.

“Sirs, my name is the heritage of my parents. It is all I have, and it is not for sale. Do your duty in all things. You cannot do more, you should never wish to do less.” ~ Robert E. Lee

I believe the best retirement planning advice I can offer to successful individuals is to do exactly the opposite of what the government and most retirement or investment professionals suggest. Washington always recommends what is in their best interest, as do most bankers and investment firms, the so-called financial experts who just received trillions in bailouts and guarantees with your tax dollars.

Can you appreciate the irony and hypocrisy of financial institutions like Merrill Lynch or the Bank of America, just to mention a few, who have so little respect for the American public that they can still advertise to manage your investments or even handle your day-to-day banking needs when both went technically bankrupt? They pay themselves outlandish bonuses, yet they only survive in business at all because of the billions in bailouts and guarantees paid for by you, the American taxpayers, and forced on you through the lobbyists they used to buy the bailout votes in Congress.

I’m retired from the investment business. But I want to warn the American public about the growing threat to our retirement assets and benefits from a government gone wild, desperate for revenue, and looking for funds to buy their increasingly risky and ultimately worthless treasury obligations. You’ve been warned, I’ve done my duty as an American and an expert in the field. The rest is up to you.

Key Elements of the Obama Retirement Trap

Stealth Nationalization

Following their attempt at “so-called” health care reform in 2009 and 2010 – the first step in total nationalization of health care – Washington will next turn its attention to another broken program, the private retirement system. Although both health care and the private retirement system need real reform, the government, as usual, will use the problems to expand federal control and redirect the contributions currently going into quasi-private programs back towards the bankrupt coffers of the federal government.

Your Retirement Plan Will Soon Become Washington’s ATM Machine

Today over $15 trillion is sitting in tax-favored retirement plans, including $4 trillion in IRA accounts. Retirement savings make up 35% of all private assets. Washington is broke, the deficit is soaring and Congress simply can’t wait for Americans to retire so they can start taxing these funds. The politicians are tired of waiting; they need your money now.

The Trojan Horse

The nationalization will begin with a modest proposal to increase retirement security and basically create a new, third level of mandatory retirement benefits in addition to private plans and Social Security. This will be described as a Guaranteed Retirement Annuity or Account. Teresa Ghilarducci is the author of this leftist plan which first appeared in 2007 at the Economic Policy Institute: Agenda for Shared Prosperity. In 2008, she became the new Director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research. In her book When I’m 64: The Plot Against Pensions and the Plan To Save Them, she hypes her retirement solution for millions who do not have adequate retirement savings. Her ultimate solution is to confiscate most of the retirement assets of successful and wealthy Americans.

In the proposal, the government will even make an annual contribution to every citizen’s account of around $600 annually, covering the unemployed, under-employed and all working Americans. The initial problem for productive, successful Americans is that Washington will require, in exchange for their contribution, that all working Americans contribute 5% of their annual salaries or income into this new “guaranteed account” managed and run by the hard-working bureaucrats at the Social Security System. Successful Americans will of course complain about losing the deduction for this contribution, which is little more than a new 5% tax on income. But this is just the beginning of the problem for Americans with substantial retirement savings and outstanding benefits.

The Devil Is in the Details

Different proposals would delay retirement age until age 64, and some even later. The guaranteed retirement annuity would be structured to allow the government to hold and invest the money. Unlike your current private plan, it would be very difficult for members to withdraw their money before and even after retirement, except over the life expectancy of the participant.

I fear, following implementation of the contributory GRA program, a future legislative action by Congress would be to end the tax deductions and tax-deferred growth of all retirement plans, thus forcing these funds into the government controlled annuity. Your forced retirement contributions would be pooled and professionally managed by Social Security. Also, beneficiaries would be cheated out of half of any benefits remaining at the death of a participant because Ghilarducci’s plan has 50% of all balances at death reverting to the Feds, not the beneficiaries.

The Confiscation Event

At some time during the next decade, a global run on treasury debt and the dollar will also likely take the American stock market down past lows not seen since the financial meltdown crisis in 2008 and 2009. The 50% to 75% stock market pullback during the actual bankruptcy of the Washington debt and paper dollar will send shock waves through retirees and current plan participants as their private retirement plan balances plummet.

At this time, Washington will “come to the rescue” and guarantee all private retirement plan market values back to pre-crisis levels. The gullible American public will overwhelmingly support this effort by switching their dwindling funds into the Guaranteed Retirement Annuity managed by the government. For the first few years, Washington will probably label those few of us who warn that Americans have lost their retirement benefits as extremists, Ron Paul paranoids and Tea Party advocates.

Then it will become crystal clear to all Americans that their retirement benefits have been given away for a promise by an evil group of plunderers who have never in their history kept a promise, a guarantee, or their word on anything. The greatest theft of wealth in the history of the world will have taken place and only those few who took heed of an early warning will still have their retirement benefits and security.

You Will Be Forced to Become the Final Buyer of Last Resort for Collapsing Washington Treasury Obligations

Although the faltering dollar could rebound in the short run, the longer-term prognosis is terminal unless Washington dramatically reduces spending and borrowing. When the global run on treasury debt and the dollar develops, the current relative minor fluctuations in values today will be replaced by a virulent death spiral of historic proportions rarely seen in world history.

Sometime in the next decade, the Washington dollar collapse will take its shameful place in history at the pinnacle of fiat currency robberies by politicians and central bankers. We will lead the world in wealth lost and future generations saddled by illegitimate government debts.

In the meantime, Americans should insulate themselves from the coming dollar and debt debacle by investing in gold bullion stored in the US, as well as outside, in secure facilities like the one offered by Global Gold Inc. in Switzerland, through mining shares, as well as through foreign currency diversification with the euro and Swiss franc. Don’t wait, take action now while you still have the opportunity to protect and preserve your wealth.

In the future, when the rest of the world’s investors, governments and central banks have lost enough purchasing power through their misguided investment in Washington treasury obligations, they will still have the luxury and financial freedom to diversify maturing treasury obligations and new funds into other non-dollar bonds, gold etc. But Americans will not have this choice. They will find that their retirement funds in the mandatory guaranteed retirement annuity will be used to purchase much of the rollover of treasury debt not repurchased by the Federal Reserve System.

The taxpayers will be forced to become the buyer of last resort in the final collapse of Washington treasury obligations. This is sort like being forced to purchase stock in AIG weeks before the final stock crash.

You Are a Narrow Target of Opportunity: Not a Grand Conspiracy

This is just another revenue generator for Washington and a payback for the unions, just like the planned nationalization of health care. The target is successful, productive Americans who make good annual incomes or who have been frugal and built up substantial retirement benefits in qualified plans.

There Will Be No Public Outcry Like with Nationalized Health Care

Don’t expect a broad public reaction to the stealth nationalization to protect your hard-earned benefits. Most unemployed, underemployed, union workers in failing union plans, and eventually state and local government employees will benefit from this attack on the retirement assets of productive, successful Americans working in the private sector. You are a minority and the mob rule of democracy warned about by Thomas Jefferson is just doing what it has always done. But this time with you as the target.

“A democracy is nothing more than mob rule, where fifty-one percent of the people take away the rights of the other forty-nine.” ~ Thomas Jefferson

Don’t Cry for Us Argentina

Bankrupt governments have a recent history of confiscating and nationalizing private retirement programs. Back on October 21, 2008, Fernandez de Kirchner, the president of Argentina, announced plans to take over $29 billion of private pension accounts, saying a state-run system would protect retirees from fluctuations in financial markets. Roque Fernandez, an economy minister and central bank president in the 1990’s, said the move is a “confiscation” of people’s savings.

How the Government Benefits from the Guaranteed Retirement Annuity

Initially, the government will receive a dramatic increase in revenue as Americans will be required to contribute (without a deduction) 5% of their annual income (without a cap like Social Security) into the GRA. These contributions will be accounted for in some type of statement, but the actual funds will disappear into the Washington coffers just like your annual Social Security taxes.

Secondly, the eventual loss of contribution deductions and tax-deferred growth in competing private plans will kill them and either a real or contrived financial crisis or tax rules will force most of these funds down the road into the government GRA accounts. Again, trillions of dollars will vanish into the black hole of Washington, Social Security and whatever vested private interests buy their way into management of the program. These trillions in vested retirement funds and benefits will be replaced with a Washington promise to pay you the benefits promised over your life expectancy so the actual costs to the government will be spread over many decades long after your funds have been hijacked for federal programs and government bond purchases.

The final and most important government benefit will be to use the trillions in nationalized private retirement funds first to pay the future annuity benefits. But secondarily, they will use the funds as a slush fund to invest in Washington treasury obligations as a final stop-gap measure as the rest of the world walks away from US government debt obligations and the dollar at some time in the future.

The Majority of Low Income and Union Members Will Benefit at Your Expense

For individuals, the proposal suggests if your annual income is under $12,000 per year, or if you are unemployed or never worked, then this program will benefit you because the proposal calls for a $600 per year contribution to be made to the GRA account of most Americans. Other lower income people will benefit from more of their income being forced into the GRA if they have enough disposable income to pay for their day-to-day expenses. Otherwise, this program, like most Washington efforts, will take away from Americans in the middle and upper income levels.

The main groups that will benefit from the retirement plan nationalization, in addition to Washington benefitting from increased revenues, are first the inefficient, overpaid automobile unions and their workers primarily in the northern Midwest rust belt areas. This proposal is first and foremost a government revenue generator, but second a bailout of underfunded, mismanaged and corrupt union retirement plans.

Later, as local and state governments continue to flirt with bankruptcy, the GRA funds will likely be utilized to bail out state and local government plans. These underfunded programs will be merged into the GRA program with the benefits paid again by the confiscated funds from participants, or with what the government will consider over-funded benefits.

There Is Always a Crisis Just When the Public Needs to Be Motivated

“Nothing just happens in politics. If something happens you can be sure it was planned that way.” ~ President Franklin D. Roosevelt

Have you ever noticed how lucky democratic political leaders are when public opinion needs to change. From Fort Sumter at the beginning of the Civil War to the explosion of the battleship Maine starting the Spanish-American War. From the sinking of the Lusitania getting the US into World War One to the creation of the Federal Reserve in response to earlier financial panics. From the Gulf of Tonkin attack and the Vietnam War to the surprise of Pearl Harbor and the Second World War. Then, in today’s age, consider 9/11, Osama, and Afghanistan giving rise suddenly to the Patriot Act and an entirely new foreign policy.

Economic, political and foreign policy crises, actions and responses have the unique ability of molding public opinion almost always behind the government. We saw this in the demands for a bailout of Wall Street when the word “depression” was used in every government and political announcement until the bailout funds were secured, then the word “recovery” became the “word of the day.” It will be the same when the global run on Washington treasury debt and the dollar happens. Asset values will tumble and suddenly Washington will have the perfect solution to solve your loss in portfolio values and the debt crisis.

What Would Spark this Nationalization?

A plan this radical cannot just slip through Congress. It can only ride into law on a first-class national crisis. As we’ve mentioned, somehow the politicians are always able to find one when they need one.

Loss of Triple-A Status for U.S. Treasury Bonds

The loss of triple-A status for Treasury bonds is the most likely trigger. And according to Steven Hess, Moody’s lead analyst for the U.S., it’s not that far-fetched. He states, “The AAA rating of the U.S. is not guaranteed. So if they don’t get the deficit down in the next 3 to 4 years to a sustainable level, then the rating will be in jeopardy.”

Terrorist Attack or Military Disaster

A terrorist attack or a military disaster like the collapse of Pakistan or an Israel/Iran conflict and disruption of oil shipments could close American markets just as we saw in 2001. That would create a financial crisis overnight.

Another Economic Meltdown

After years of deficits, the greatest hazard to our economy is a run on the dollar and on treasury securities by foreign investors. Although America’s foreign creditors don’t want to start a run on national debt – they prefer a slow, orderly retreat – no one intends to be the last to head for the exit. Political or economic pressures in Asia could force Japan or China to take immediate action, dump our debt, and knock the prices down to fire-sale levels.

What happens if China decides to cut its losses on U.S. Treasuries and issues a $100 billion sell order? That’s only 10% of their holdings, but it could set off panic selling of dollar-denominated bonds and crush the U.S. stock market like an egg shell. Mortgage rates would spike, which would suck the housing market into another air pocket. The President would probably sign an Executive Order closing the markets until order could be restored.

Any of those events would take place in an atmosphere of deep public worry and fear. That’s when Washington would come to your rescue and guarantee to restore your retirement funds back to a “pre-crash” level. How nice, right? However, in exchange you would need to “voluntarily” move your retirement assets into your new Guaranteed Retirement Account.

Implications for Those Who Say “No”

For those who don’t sign up for a GRA because they’re not fooled by the dangled carrot, there would be sticks to consider:

Additional withdrawal penalties and wealth taxes on their retirement plan.

Limitations on permissible investments – nothing that isn’t “in the public interest.”

Mandatory minimum holdings for targeted investments, such as Treasury obligations.

An end to offshore investments that could protect your wealth and actually benefit investors during a time of hyperinflation.

Remember, these retirement proposals are just in the discussion stage but progressives are promoting this confiscation agenda to the Obama Administration as a new source of revenue for a bankrupt federal government desperate for additional sources of revenue. When the next economic or stock market crisis hits, your retirement assets will be at risk from this type of confiscation effort regardless of whether the Democrats or Republicans are in control.

How to Protect Your Retirement Benefits and Security

“When plunder has become a way of life for a group of people living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it.” ~ Frédéric Bastiat

First of all, the final forced takeover of existing retirement plans will be Washington’s response to a crisis; a crisis, I fear, welcomed by a majority of the American public. It will be legal, authorized and sold to the public by the media and experts. The reality of the action will slowly filter into the American consciousness over time but those of you who protected your assets and actually financially benefit from the collapse of the dollar will not win any popularity contests. Remember: misery loves company. And you would do well to live with frugality and a low profile as there will be millions of angry, destitute Americans. The Washington politicians will blame everyone but themselves, including foreign nations, freedom loving Americans, and those not stupid enough to believe all the BS out of Washington and Wall Street.

“It is very easy to awaken resentment against people who not only have money, but also the boldness to send that money abroad…in order to protect it against all manner of domestic insecurity.” ~ Wilhelm Röpke

Strategies to Protect Your Retirement Benefits

Retirement plan assets and IRA accounts have a substantial amount of protection from lawsuits. But they are sitting ducks for confiscation and Washington controls. Uncertain times call for certain measures. Note, if you have less than $200,000 in qualified plans, do not follow these termination strategies as you should be OK. Most of the attacks will be targeted toward individuals with higher retirement plan balances.

Still, you should consider the offshore diversification and global investment strategies to protect your personal and retirement benefits from the coming dollar collapse. This way, you will benefit from what may be the investment profit opportunity of a lifetime by being in investments which should appreciate when the dollar falls.

Below Are Some Retirement Plan Protection Strategies for Your Review

Simply Be Aware of the Risks

Remember, the vast majority of Americans will never wake up to the government threat on their retirement benefits. This will work to your advantage as the politicians will work to generate the maximum amount of retirement funds and revenue in the shortest time and with the minimum amount of effort using the current bureaucracy. These following strategies will allow you to legally avoid and side-step future regulations that they will try in order to freeze your retirement plans, control your liquidity options and force your investments into the mandatory GRA, government bond obligations and other preferred government investments.

The Swiss Annuity – An Excellent Foreign Investment Strategy for Liquidity and Security

Fixed and managed variable annuities are available. A Swiss annuity can be purchased and held by a self-directed IRA when you have the proper custodian. This is a simple and uncomplicated way to diversify your IRA into hard currencies like the euro, the Swiss franc, or even precious metals. Also, a Swiss annuity purchased through a retirement plan or IRA can usually be liquidated at any time by instructing the IRA custodian or trustee to mail the contract with liquidation instructions to the appropriate Swiss insurance company.

This type of investment liquidity outside US investment markets, investment management firms, banks and mutual funds should remain free of a stock market or bank closure during a future American financial crisis. We all remember how mutual funds, stocks, bonds and even American annuities were effectively frozen in the days following the 9/11 attacks near Wall Street. Therefore, a Swiss or other foreign annuity should retain its investment liquidity in a real or contrived American financial meltdown, terrorist attack or economic crisis.

Swiss annuities are an excellent investment alternative to diversify your IRA or corporate plan outside the dollar and US financial markets. If you have an IRA, you simply decide on the Swiss annuity contract provider and choose among several US self-directed IRA custodians which allow you to direct all or a portion of your IRA funds into a Swiss annuity contract. Then you transfer your existing IRA account and funds to the new custodian and direct them how to invest your funds. Note, do not request or accept the funds personally as this would be construed as a plan distribution, incurring the taxes and penalties associated with a distribution.

The self-directed IRA becomes both the owner (for your benefit) and beneficiary of the annuity contract while you are the person insured. If something should happen to you, the annuity contract will cash out and the funds will go directly to your IRA; the beneficiary payment will follow your instructions provided in the IRA beneficiary forms.

It is also important to remember that with a self-directed IRA, it is your responsibility to review and decide on your investment options, hence the name, “self-directed IRA.” Therefore, you should review any proposed investment materials to make sure the IRA investment is appropriate for your personal, tax and family situation under current IRS regulations. You’ll also want to make sure that it meets the investment criteria for your world economic, dollar and political views of the future.

Swiss annuities and other legal IRA offshore investments are usually purchased by American investors concerned about the long-term downtrend in the dollar, future Federal Reserve and Washington actions that might further destroy their wealth, retirement security and future ability to diversify retirement funds internationally to escape a political or economic crisis.

Invest Your IRA and Retirement Plan Outside the Dollar at Home in the United States

Although I believe the seriousness of the threat to retirement plans makes it imperative to either move your retirement assets outside the dollar and the US markets, or consider taking a distribution, there is another alternative to consider in addition to plan termination and withdrawal for retirement investors with less than $200,000 in retirement plans.

Some American banks like EverBank offer foreign currency CD’s, and there are advisors and some mutual fund options available for investors who are far more worried about a future dollar collapse than outright confiscation and government control of your retirement assets.

Every dollar you continue to keep inside the United States in qualified retirement plans and, to a lesser extent, IRA accounts, is at risk of being held hostage to the coming mandatory GRA plan. Washington will attempt to force you to transfer into the GRA by the loss of tax deductions, tax-deferred accumulation and likely additional distribution penalties and investment controls.

If you have over $200,000 in retirement funds, you can expect future controls, wealth taxes and probable excess distribution penalties in addition to current regulations. The best way to reduce the risks of the coming retirement threat is to take your funds out of these qualified plan programs which will soon be under revenue and political attack.

Another solution in addition to termination and taking a distribution is to transfer your distribution after paying taxes and penalties offshore, creating a personal non-qualified account offshore in the jurisdiction of your choice. Remember, after a plan distribution or simply adding a monthly investment to your offshore funds is perfectly legal as long as you meet the reporting and tax requirements.

More and more, Americans want a government jurisdiction where the regulatory environment and legal system protects productive, successful individuals, rather than a system which views them as targets to be plundered and attacked for their personal success. Since this is the environment in the U.S. today, many freedom-loving Americans are following the old adage that if you can’t change your government, then at least change the government jurisdiction where you keep most of your wealth.

Building your future retirement nest egg outside the U.S. certainly doesn’t guarantee you investment profits or success, but it does vastly reduce the likelihood of future government investment controls, exchange controls or the forced investment of your retirement funds into government sponsored or mandated investments. As long as the solicitation rules are followed along with reporting and tax requirements, you are free to invest in approved gold bullion (no collectibles), annuities, real estate and equity and fixed income investments in non-dollar-denominated currencies like the euro and Swiss franc.

Don’t place more of your private or corporate wealth at risk by making additional corporate or personal contributions to an IRA or qualified profit-sharing, defined-benefit, money-purchase or 401(k) plan. After all, when the GRA becomes mandatory, the proposal is for 5% of your salary to be forced into the government Guaranteed Retirement Annuity or Account. So why continue your existing plan?

For Participants in Qualified Retirement Plans

If you are only a participant in a qualified plan and you aren’t a plan sponsor or in top management, reduce any required contributions to the minimum necessary to receive the maximum employer matching contributions. This advice is especially appropriate for employees covered under the popular 401(k) plans.

Stop All Voluntary Contributions to Existing Plans

For every type of qualified plan, immediately stop all voluntary contributions, both before and after tax. Here, voluntary contributions transfer private personal funds, into qualified plan funds, which are usually subject to increased restrictions on contributions, investments and distributions. Keep your personal wealth out of qualified plans with their soon-to-be increased limitations, taxes and penalties. The current tax benefits, such as tax-deferred growth and sometimes a deduction for the contribution, will soon be lost. There is no compensation for investors in exchange for the ultimate loss of ownership and investment control.

For Qualified Plan Sponsors – Start Terminating Your Plan While You Still Can!

Washington does not want you to terminate your retirement plan now before the GRA is in place. They will need a real or contrived crisis combined with the extra distribution penalties and the loss of tax-deferred growth to make it necessary for most retirement plans and participants to transfer their funds into the proposed Guaranteed Retirement Annuity program. My advice is, depending on your business or personal circumstances, to terminate before the government makes this option prohibitive.

It is important to meet with your accountant or pension advisor and begin the process of requesting IRS approval for the termination of your plan and the distribution of the benefits to the plan participants. Many plan sponsors find it is very difficult to terminate primarily because the plan investment advisors and CPA’s or tax advisors make money from the ongoing continuation of the plan. They find going against the recommendation of these experts is far more difficult than dealing with the required government forms and regulations.

Check with the IRS on how long it takes in your IRS district to receive IRS approval for a plan termination. When more plan sponsors wake up to the pension threat, America will see an avalanche of plan terminations, causing long delays in the IRS processing of termination requests. This is when the politicians and regulators will move to “temporarily” freeze plan terminations. Then rest assured, the temporary freeze will become permanent; you and your retirement assets will be trapped.

If you wait until the rush of plan terminations is covered on the nightly news, CNBC or conventional establishment news websites, you will have waited too long. Your plan assets and benefits will become trapped and forced into the coming mandatory system. The only retirement benefits you’ll receive will be the standard annual benefits they allow you to withdraw monthly without penalty or excessive tax rates.

Begin Now to Reduce Your Wealth in Retirement Plans to the Minimum Possible Level

In future years, as a plan sponsor or participant with a fund in excess of $200,000, your goal should always be to have the minimum funds possible in any type of government-approved qualified retirement plan or IRA, since every dollar is at a future risk of forced transfer into a future GRA-type mandatory retirement program. Although there is no way you or your employer can escape the coming mandatory program entirely if you have qualified retirement funds, it’s prudent to at least keep your exposure and risk to a minimum.

This is why I suggest terminating your plan and reducing or ending your contributions as an early step in protecting your retirement wealth and benefits. There is no way of knowing in advance the political timetable of this retirement trap; therefore, predicting the plan termination panic and when the government will close the door on your retirement funds is also impossible. Remember, a financial crisis from the future treasury debt and dollar crisis could be sparked by actions from foreign holders of treasury obligations ranging from China, to Japan, to the oil-producing countries.

If Terminating Your Plan – Do You Take the Distributions Now and Pay the Existing Taxes and Penalties?

If you are over 59½ – remember, I believe one of the first moves in the attack will be to delay the early retirement age to maybe age 64 – and your tax bracket is low, then meet with your tax advisor. Ask about whether you should pay the taxes and get your funds out from under the current and future confiscatory qualified retirement plan regulations.

For participants in their 30’s to 50’s with more than the $200,000 threat level in qualified plan assets, I would also suggest that you “bite the bullet” – including the early distribution penalties – and take the funds out now, while you still have the opportunity [something your Whiskey Bar manager himself did at the first opportunity–ed.]. The costs of getting out from under the existing government plan system will only increase as time goes by. Penalties, controls and taxes will never be reduced, only increased, and Congress will make sure there is no way any productive, working American can escape the annual forced contribution as a percentage of your salary into the new GRA accounts. The GRA system will be just another black hole on your paycheck each month, just like Social Security. They get your money and you get a promise which they will consistently over time change to their advantage and your detriment.

If Terminating Your Plan – Do You Defer Taxes and Transfer the Funds to an Offshore Self-Directed IRA?

If you expect your income to drop or you require a number of years to withdraw the funds, placing your qualified plan funds into a self-directed IRA can be an excellent decision for a number of reasons. First, the mandatory plan will not be passed for at least a couple of years, and it will be some time later with a new crisis that Washington moves to force all plans into the GRA.

When the passage of the GRA (or whatever they call it) legislation is imminent, that will be the time to immediately close out your IRA account and take the distribution, regardless of taxes and penalties. This may well be the “last train out” for your accumulated retirement benefits. But remember, with an IRA investment like a Swiss annuity, your funds will still be liquid even if a crisis closes the US markets and the banks and you can reinvest the proceeds after paying any taxes and penalties personally or take a distribution in kind to take the distribution, thus remaining in a hard currency like the Swiss franc or euro.

For Existing Large IRA Rollovers

If you are age 59½ and already in an IRA rollover with a substantial balance, then I would begin to withdraw the funds now, with a goal of having at least 50% of the funds out and privately held within the next five years. Remember to discuss all of this with your CPA or tax advisor.

If You Must Keep Your Qualified Retirement Plan, Make Sure You Are the Trustee

If you have only a small number of employees and must continue your qualified plan, either for tax reasons or employee morale, a self-trusteed plan is far superior to one with an outside trustee and custodian. Most importantly, a properly drafted plan will give you, the trustee, the right to be custodian of the plan assets. While this is not an important benefit for mutual fund or investment security accounts, as here for convenience an independent custodian should maintain custody of any liquid or trading investments, there is a significant benefit for having personal custody of other plan investments.

In a crisis situation, having stock certificates in certificate form might provide some additional liquidity if some investment firms and outside custodians become insolvent. Also, both domestic and foreign annuity certificates should be held by you as the trustee and custodian for security purposes.

Remember, in the event of a closure or “government mandated emergency” in the securities markets, on the NASD, and NYSE, all American equity mutual funds and variable annuity portfolios can be frozen for the duration of the crisis. This just might be the time you require liquidity and cash most of all. With foreign annuities, a Swiss annuity or an offshore private annuity outside of American markets, these contracts can be mailed overnight to the respective insurance companies for liquidation or a distribution in kind. This is a taxable event but it can provide you a way to take a legal distribution out of retirement plans in a crisis situation when 99% of American investors are frozen inside a closed US investment market environment with assets waiting to be plucked by Washington.

Prevent Government Control of Your Retirement Investments or Forced Liquidation with a Swiss Annuity for Life Without Refund Option

Whether you have a self-directed IRA or a self-trusteed retirement plan, you can purchase a Swiss annuity policy for life, only with refund, or surrender value. In the event of a future financial crisis, Washington might attempt to force your existing retirement funds into the new GRA or to invest a portion of your non-GRA retirement fund in certain government-preferred investments like treasury obligations. This life annuity without refund option cannot be changed, nor can the contract be liquidated. This is a unique situation where restricted investment liquidity might work in your favor. You should discuss this option with a Swiss annuity expert.

Consider a “Distribution In Kind” with an Offshore Annuity Retirement Investment for Ultimate Liquidity

If there is a world-wide crisis and all investment markets close temporarily, you may or may not be able to liquidate your domestic or foreign annuity. In either case, your foreign annuity contract would be far safer from government confiscation attacks than one purchased in the USA.

In this “worst case scenario,” foreign annuities could still be withdrawn from qualified retirement plans and IRA accounts by the participant taking a “distribution in kind” of the contract. This is where the contract is re-registered in the name of the plan participant instead of the plan by written instructions, sending the contract back to the insurance company for re-registration of the ownership. Take note that in this case, the beneficiary would also change from the retirement plan to your preferred beneficiary. This is also a taxable event and whatever distribution penalty and taxes due on the withdrawal would be due at that time.

A “distribution in kind” has been utilized for many years in American plans where the participant prefers the distribution of the actual investment, rather than a distribution by check. For example, American IRA investors might prefer to withdraw their Amazon.com stock in shares rather than liquidating the stock. This is a “distribution in kind.”

Delay Could Be Fatal

The bottom line on all the strategies I’ve discussed above is they must be started and in place before the next major economic crisis and threat to your retirement assets occurs. If you, at the very minimum, do not have your offshore retirement program created and partially funded before the crisis and nationalization takes place, none of your remaining wealth in the United States may likely be expatriated outside the U.S.

In a crisis, the government will be forced to control the flow of funds offshore by private individuals and this prohibition will be total, except for politically-favored individuals and large multi-national businesses which will be exempted from the financial iron curtain descending around our borders. Exchange controls – a prohibition on wiring funds offshore, checks, the movement and ownership of cash and precious metals – will be curtailed. Presidential Executive Orders will destroy the last vestiges of civil liberties and the Constitution and Bill of Rights, formerly hanging by a thread, will be curtailed for the duration of the crisis. The door will slam shut!

“If you do not say a thing in an irritating way, you may as well not say it at all, because people will not trouble themselves about anything that does not trouble them.” ~ George Bernard Shaw

Ron, You don’t say why there is a 200K limit to this strategy. What if one were to have a 120K balance – long silver short the market – this could easily become 200K by the time this crisis starts. Please explain the limit.

Ron…superb, thanks, and I liked your one on secession even better. It is a real joy to read such excellent prose showing a firm grasp of facts. I sent this to my brother (normally an alpha type) and he told me condescendingly that you were just selling something. I replied scathingly that he should read the text again because you’re retired. It was extremely kind of you to provide such specific professional advice covering all the permutations. I know what MY CPA costs. Warm regards, Linda

I’ve been reading this type of sky-is-falling rhetoric for decades. Ain’t happened yet.

http://http//www.sexualharassmentresources.com Bill Barger

Heck, look at Amtrak, USPS, VA Hospital System, Medicare and Social Security–and it gives us a clear view of how out of control, and untrustable the Fed is when it comes to doing anything. They have taken over the banks, the auto industry, and now they want the HealthCare system, and our retirement savings. It looks to me that not only my money needs to head off shore-but perhaps myself as well.

Ed, y’all ain’t seen nothing yet. This is a last ditch effort to take US down. If good men continue to do nothing, then divided we fall. However, united we stand. Get on board while you still can. We the people will prevail.

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